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June 6, 2021 11:58 pm

You may contribute funds from an IRA to a Qualified Longevity Annuity Contract (QLAC), up to the lesser of 25% of your IRA (including any QLAC) or the dollar limit applicable for the year. The origina...

May 3, 2021 11:06 pm

Condolences on the death of your spouse. Because you were married for all of 2020, you may file as married filing jointly. If you e-file, simply follow software instructions. If you file a paper retur...

May 3, 2021 11:04 pm

Required minimum distributions were waived for 2020. Anyone who did not take a distribution is fine; no special filing is required....

May 3, 2021 11:03 pm

You may have a capital gain on the sale of land adjacent to your home. Whether or not a mortgage is involved does not impact gain or loss for federal income tax purposes. However, you may be able to u...

May 3, 2021 11:01 pm

Yes. However, if the distribution from a qualified retirement plan or IRA is a “coronavirus-related distribution,” then no 10% penalty applies for anyone under age 59½. What’s more, a coronavir...

April 6, 2021 11:38 pm

If the amount of the underpayment is more than $1,000, you can avoid penalties if you’ve paid at least 90% of the tax liability for the year or 100% of 2019’s tax liability (110% if your adjusted ...

April 6, 2021 11:36 pm

No. Gambling winnings must be reported as income, but gambling losses are deductible only as an itemized deduction. There is no dollar limit on the write off but it’s limited to the extent of the ga...

April 6, 2021 11:34 pm

The nonbusiness energy credit, which is for adding insulation and certain other energy improvements to a principal residence, has been extended through 2020. The credit for solar and certain other ren...

April 6, 2021 11:31 pm

Long-term disability income that you receive prior to the minimum retirement age under your employer’s plan and that is shown as taxable compensation in box 1 of Form W-2 is treated as earned income...

March 1, 2021 9:13 pm

Teachers can include COVID-19-related expenses in claiming their “above-the-line” deduction of up to $250. Such expenses include face masks; disinfectant; hand soap; hand sanitizers; disposable gl...

You may contribute funds from an IRA to a Qualified Longevity Annuity Contract (QLAC), up to the lesser of 25% of your IRA (including any QLAC) or the dollar limit applicable for the year. The origina...

Condolences on the death of your spouse. Because you were married for all of 2020, you may file as married filing jointly. If you e-file, simply follow software instructions. If you file a paper retur...

Required minimum distributions were waived for 2020. Anyone who did not take a distribution is fine; no special filing is required....

You may have a capital gain on the sale of land adjacent to your home. Whether or not a mortgage is involved does not impact gain or loss for federal income tax purposes. However, you may be able to u...

Yes. However, if the distribution from a qualified retirement plan or IRA is a “coronavirus-related distribution,” then no 10% penalty applies for anyone under age 59½. What’s more, a coronavir...

If the amount of the underpayment is more than $1,000, you can avoid penalties if you’ve paid at least 90% of the tax liability for the year or 100% of 2019’s tax liability (110% if your adjusted ...

No. Gambling winnings must be reported as income, but gambling losses are deductible only as an itemized deduction. There is no dollar limit on the write off but it’s limited to the extent of the ga...

The nonbusiness energy credit, which is for adding insulation and certain other energy improvements to a principal residence, has been extended through 2020. The credit for solar and certain other ren...

Long-term disability income that you receive prior to the minimum retirement age under your employer’s plan and that is shown as taxable compensation in box 1 of Form W-2 is treated as earned income...

Teachers can include COVID-19-related expenses in claiming their “above-the-line” deduction of up to $250. Such expenses include face masks; disinfectant; hand soap; hand sanitizers; disposable gl...

No, there is no carryback for capital losses. Capital losses can offset capital gains and up to $3,000 of ordinary income. Any capital loss over this limit can be carried forward indefinitely to offse...

No. Trustees or issuers of traditional IRAs must furnish Form 5498 to participants each year if there is a contribution (including a rollover) or a distribution. It is merely an information return tha...

It’s time to look at a calendar to see whether you meet the time test for the home sale exclusion. You must have owned and used the home as your principal residence for at least two of the five year...

Suspended passive losses become deductible in the year in which there is a complete disposition of the property in a fully taxable event to an unrelated party. The fact that the losses remained suspen...

When you sell property, the difference between what you receive and your tax basis in the property produces gain or loss. When selling property, include what you paid for this, such as the land and th...

Gain or loss is the difference between the basis of the stock and what you received for it. The basis of inherited stock used for determining gain or loss is the estate tax value, which is usually the...

The payment of principal is never a deductible expense. However, check the payoff information to see whether there were any fees paid in addition to principal; the fees may be considered a selling exp...

There’s no simple answer. The tax treatment of the award—as ordinary income, as capital gains, or as a nontaxable return of investment—depends on the origin of the claim. The question you have t...

The dollar limit for contributions to a medical FSA for 2015 is $2,550. Each spouse can contribute up to this limit as long as each works for an employer offering such a plan. This enables a couple to...

Your husband can total all of his IRAs and then take his annual distributions from any one or more of the accounts; you must figure your RMD separately and take it solely from your IRA....

Because you are a volunteer and not a paid educator who works at least 900 hours a year, you cannot use the above-the-line deduction of up to $250 from gross income (allowed even if you don’t itemiz...

Unfortunately, no. Gifts to individuals, no matter how needy, are never deductible. Only gifts to IRS-recognized charities are deductible if you itemize deductions. In the case of the Louisiana disast...

A repayment of principal is never deductible. Interest on the loan may be deductible, depending on what you used the proceeds for. If you purchased securities, the interest is treated as investment in...

This rule expired at the end of 2014 and has not yet been extended for 2015. Many believe it will be extended, but it is advisable to wait until later this year to see what Congress does before making...

If you are talking about federal income taxes, they are never deductible. If you paid state income taxes for 2014 when you filed your return in 2015, the additional taxes you paid with your return bec...

The home office deduction is allowed for both employees and self-employed individuals, with this difference: employees must use their home office for the convenience of the employer (not for personal ...

Not yet. The more than four dozen tax rules that expired at the end of 2014 have yet to be extended for 2015. Stay tuned!...

Suspended passive losses become deductible in the year in which there is a complete disposition of the property in a fully taxable event to an unrelated party. The fact that the losses remained suspen...

No. Eligibility for the earned income tax credit is based on income, not age. The amount of the credit varies with the number of qualifying children you have. A modest credit applies even if you have ...

Job-loss mortgage insurance is a policy that pays some or all of the mortgage payments (and, under some policies, real estate taxes and homeowners insurance) if you lose your job. The IRS has not rule...

Only a taxpayer, or a representative with a taxpayer’s permission, can obtain copies of previously filed tax returns. Ask your parents to take action: They can request a free copy of a transcrip...

In the case of a joint tenancy with someone who is not a spouse and who did not contribute anything, the basis depends on the estate tax value of the property (even if the estate is too small to be re...

Once you are enrolled in Medicare, you are no longer eligible to contribute to an HSA. Your contributions must be prorated for the period in which you have a high-deductible health plan (HDHP). Thus, ...

The IRS has yet to rule on the tax treatment of relocation payments under the Home Affordable Foreclosure Alternatives (HAFA) program, and some people in your situation have received a Form 1099-A or ...

There are several tax breaks for college tuition payments: an above-the-line deduction (this break expired at the end of 2013 but likely will be extended for 2014), education tax credits, an exclusion...

Federal income taxes are not deductible. Similarly, you cannot deduct your payment of FICA on wages or the additional Medicare taxes on earned income (0.9% over your threshold amount) and net investme...

No. A Schedule C is required if you are in a trade or business. However, you can report miscellaneous income on line 21 of Form 1040 (“other income”). This miscellaneous income is not subject to s...

It depends on whether you’re viewed under the tax law as a developer. If you hold the lot as investment property, any gain you reap is taxed as capital gain. You may also owe an additional 3.8% tax ...

Earned income remains taxable regardless of age. Similarly, such income continues to be subject to Social Security and Medicare taxes (FICA for an employee; self-employment tax for a self-employed per...

No. The computation of alternative minimum tax (AMT) starts with adjusted gross income from which itemized deductions other than miscellaneous itemized deductions and state and local taxes are subtrac...

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